US firm offers cheque imaging solutions

US-based Bankserv Inc is in talks with its Indian partner aurionPro Solutions to offer rupee cheque imaging for the Indian market.

Bankserv is targeting Indian banks as it plans an investment to the tune of $500,000 in the country.

"We are planning to offer banks cheque imaging devices, which can be installed in every bank branch," said David F Kvederis, president & chief executive officer, BankServ.

It is already in talks with a leading public sector bank to offer cheque-imaging in the country, he added.

BankServ's plans to enter the Indian market follow the Reserve Bank of India (RBI) introducing an image based cheque clearing system in New Delhi by July 2005.

Once the cheque truncation system (CTS) is in place, cheques will be scanned on depositing and their electronic image, rather than the actual physical cheque, will be transmitted through the clearing cycle.

RBI has already short-listed three vendors for inter-bank exchange of large files. BankServ however, is not looking at bidding for the pilot project as it is more keen to offer the product directly to bank branches. The cheque imaging units would cost on an average of $450 per unit.

All the major banks will participate in the pilot cheque truncation project once the CTS guidelines are issued by the central bank by April 2005. On completion of the pilot project, CTS will be implemented in the other metro cities.

The RBI hopes to eliminate the physical transfer of cheques in the peak centres.

Cheque imaging first came about post the September 11 terrorist attacks in the US. As all airports came to a standstill for a week, no cheques were able to move within and from outside the country. This brought about the need to make 'legal' cheque imaging under the Check 21 Law under the Patriot Act.

State Bank of India (SBI) and Punjab National Bank (PNB) are the two major banks to participate in the pilot project. The regulator is also planning to set up a centralised clearing system and a central warehouse in Delhi.

The RBI has received bids from seven IT companies, including software solution providers such as IBM, TCS and Infosys. The central bank is currently evaluating the vendor bids.